Question

write 2 situations for allowing interest on
capital to partnes​

Answer 1

Two situations for allowing interest on capital to partners are :-

(1) When there is a provision in the partnership deed for providing the interest on capital if the partnership deed is silent on does not exist then interest on capital contribution cannot be allowed.

(2)When they gives profits :- Interest on capital can only be proved for when there are profits. In case of loss ,no interest on capital can be allowed even if partnership deed contains such provision.

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